According to Octane Capital, which compared rents increases versus the average cost of a buy-to-let mortgage with a 40 per cent deposit and new tenancy, this means that mortgage costs average at £982 per month compared to £1,068 average rent in July this year.
This is up from an average mortgage cost of £868 and average rent of £972 in the same period last year.
The gulf between mortgage and rent costs is highest in Yorkshire and the Humber, where mortgage payments have grown 15.2 per cent year-on-year to £712 whilst rents have risen by 7.4 per cent to £826.
In the North East, mortgage rates have jumped by 15.4 per cent compared to the same period last year at £547 per month, compared to a rental price rise of 7.6 per cent bringing it to £636 per month.
In London, rents have gone up by around 12.9 per cent compared to the same period last year, exceeding the 11.4 per cent increase in mortgage payments.
In Scotland, where the government brought in rent control, rents have jumped by 15.8 per cent year-on-year to £973 per month, which compares to a 12.4 per cent leap to £643 a month for a mortgage.
Jonathan Samuels, CEO of Octane Capital, said: “While landlords are often blamed for ramping up rents, in many cases buy-to-let mortgage costs are rising faster than the cost of new tenancies.
“This is particularly the case in Yorkshire and the Humber and the East Midlands, where the markets clearly don’t allow landlords to recover all their higher outgoings in the form of rents.
“This year has undoubtedly been a tough one for landlords and renters – as neither has been able to escape rising costs.”
